USMacroBETA

Commercial Real Estate Delinquency

Positive
CURRENT VALUE
1.53%
Source: Federal Reserve via FRED
Data through: Q2 2026 · updated Aug 26 · Updates: Quarterly
↓ 0.0 pp YoY
Historical context: Currently in the 42th percentile of all historical readings.
What this means right now: CRE delinquency is at healthy levels — the commercial real estate market is stable with manageable stress. Banks with CRE exposure face limited credit risk.
Commercial Real Estate Delinquency · Quarterly · 1991–2026
Grey areas = NBER recessions · Scroll to read · zoom and pan in Expand
Monthly values

Commercial Real Estate Delinquency — the last 8 quarters

Every quarter's reading, with the band the heatmap gives it. The chart above shows the same series in full.

QuarterValueBand
Q2 20261.53%Healthy reading
Q1 20261.56%Healthy reading
Q4 20251.58%Healthy reading
Q3 20251.57%Healthy reading
Q2 20251.57%Healthy reading
Q1 20251.57%Healthy reading

Quarter-end readings of the same series the chart shows, from commercial_re_delinquency. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.

What is the Commercial RE Delinq.?

Commercial real estate (CRE) delinquency measures the percentage of commercial real estate loans held by banks that are 30 or more days past due. CRE includes office buildings, retail centers, apartment complexes, industrial warehouses, and hotels. The sector has faced significant stress since 2020 as remote work devastated office demand, e-commerce accelerated retail closures, and rising interest rates made refinancing prohibitively expensive for many property owners.

CRE delinquency is particularly important to monitor because banks — especially regional and community banks — hold large concentrations of commercial real estate loans. When CRE delinquencies rise, bank credit losses increase, reducing their capacity to lend and potentially threatening financial stability. The office sector faces structural challenges that may be permanent rather than cyclical, creating long-term stress that differs from typical economic cycles.

How We Color-Code the Commercial RE Delinq.

Our heatmap colors each indicator based on historically significant thresholds:

Below 0.75%
Very low — CRE market healthy, banks facing minimal credit losses
0.75% – 1.5%
Low — CRE market stable with manageable stress
1.5% – 3.0%
Moderate — some CRE stress building, banks monitoring
3.0% – 5.0%
Elevated — meaningful CRE distress, bank losses rising
Above 5.0%
High — significant CRE crisis, systemic bank risk

Historical Extremes — What Happened Next?

When this indicator reaches extreme levels, history shows consistent patterns:

2010Financial Crisis Peak
8.75%
Driven by over-leveraged commercial construction and development loans — caused significant losses at regional banks and a wave of bank failures.
2022Post-COVID Historic Low
0.72%
Near-record low delinquency — pandemic-era stimulus kept many properties viable even as underlying demand changed. The reckoning was delayed, not avoided.
2024-2026Office Market Stress
Rising toward 2-3%+ for office sector
Office CRE faces structural impairment from remote work combined with refinancing pressure as low-rate loans mature at much higher current rates.

Investor Checklist — Current Reading

Based on the current Commercial RE Delinq. reading of 1.53% (Positive):

✓Stable CRE market — manageable bank credit risk from commercial real estate
ℹWatch office and retail subsectors specifically — most structural stress concentrated there

Frequently Asked Questions

Why is office CRE particularly stressed in 2024-2026?
Two structural forces have devastated office demand: remote and hybrid work (reducing space needs by 20-40% for many companies) and the maturation of low-rate office loans taken out in 2019-2021 that now must be refinanced at much higher rates. An office building financed at 3% in 2020 may generate insufficient cash flow to refinance at 7% in 2024 — creating a "maturity wall" of loans unable to refinance.
How exposed are US banks to commercial real estate?
Large banks (JP Morgan, Bank of America) have diversified loan books with CRE representing 5-10% of total loans. Regional and community banks are much more concentrated — many have CRE representing 200-400% of their total capital. The FDIC and Fed regulators specifically monitor banks with CRE above 300% of capital as potentially vulnerable. Regional banks failed in 2023 partly due to CRE concerns.
Is apartment (multifamily) CRE also at risk?
Multifamily has faced less structural stress than office or retail because housing demand remains strong. However, the massive apartment construction boom of 2021-2023 has created oversupply in some markets, putting pressure on rent growth and property valuations. Higher-leveraged multifamily loans are also stressed by refinancing costs. Multifamily is less alarming than office but not immune.
Can a CRE crisis cause a broader financial crisis?
A CRE crisis alone is unlikely to replicate 2008 — the 2008 crisis was systemic because residential mortgage securities were held globally. CRE losses are more concentrated at regional and community banks, not globally dispersed. However, CRE stress can cause regional bank failures, tighter lending conditions, and economic slowdowns in affected markets. Significant but likely more contained than residential mortgage crisis scenarios.
Which commercial real estate sectors have the highest delinquency rates and why?
Office and retail properties have seen sharply rising delinquency since 2022, driven by structural shifts — remote work reducing office demand and e-commerce reducing foot traffic for retail. Multifamily delinquency has been rising more recently due to oversupply in certain Sun Belt markets and higher floating-rate debt costs. Industrial and logistics properties have had the lowest delinquency due to strong demand from e-commerce fulfillment. The aggregate DRCRELEXFACBS series tracked here blends all these subsectors, so watching the direction of change matters more than the absolute level for cycle signals.